From the CDS team

2020 was a year like no other, and one which the nation will feel the effects of for years to come. Businesses and individuals will continue to face challenges around recession and uncertainty, and the road to economic recovery is long.

However, despite the disruption, we adapted our ways of working to continue promoting and supporting employee ownership, community co-operatives and consortium co-operatives, which play a critical role in this recovery. Our Reset and Rebuild campaign, launched in October, highlights this, championing the contribution that inclusive business models will make as the people of Scotland call for a fairer economy which distributes wealth more widely and addresses inequalities.

Throughout the year, we’ve seen 17 businesses complete their transition to employee ownership despite the unforeseen circumstances. In Glasgow, CDS supported archaeological services provider GUARD Archaeology and civil engineering firm MHB Consultants to make the move, while Edinburgh saw contemporary furniture and interior design company Tangram Furnishers Limited and Scotland’s largest product design company Shore Design sold to their employees. In the north east, IT provider ITWORX celebrated its tenth birthday by becoming employee-owned, to reward staff, enhance company culture and differentiate from competitors.

Guard Archaeology

In September, we launched a series of webinars for professional advisers and business owners exploring the Employee Ownership Trust as a succession solution with unprecedented attendance. Our advisors have continued to respond to enquiries about EO throughout the year, with several more deals in the pipeline.

In terms of existing EO businesses, like all businesses, they have faced their own unique challenges. However, a recent survey found that 76% of Scottish employee-owned companies surveyed believed their ownership model helped them get through the COVID-19 crisis. Shore Design believes that being employee-owned has helped bolster staff productivity, engagement and morale while the team works from home, while Jerba Campervans shared full details of the business’s financial position with staff to reassure them about job security.

The Shore Design team in pre-COVID times

Looking ahead, with the economic uncertainty leading to a decline in merger and acquisition activity, selling to an Employee Ownership Trust could be an ideal exit solution for many business owners. With a lack of buyers for traditional trade sales, we expect to see a significantly increased interest in employee ownership.

2020 also saw CDS take further steps to increase the number of community co-operatives in Scotland, by strengthening our partnership with Community Shares Scotland and the Plunkett Foundation to work together to raise awareness of the wider community business sector and the available support in Scotland.  With the pandemic highlighting the importance and effectiveness of local business, we hope that more organisations, projects and communities recognise the economic and social potential of community co-operatives and explore their options in this area. 

Community-owned grocer The Crunchy Carrot in Dunbar

The pandemic has also heightened and highlighted community spirit within the business world, creating the opportunity for businesses to work together to overcome challenges and address problems. Formalising these relationships with a consortium co-operative model could be an effective way for businesses to improve market presence, achieve new goals and drive innovation, while minimising risk in these uncertain times. We continue to promote the benefits of collaborative working in the wake of the pandemic and offer support to those businesses looking to form a consortium co-operative.

In October we commissioned a survey into the effects of Covid-19 to launch the Reset and Rebuild campaign and demonstrate the desire for a reset of Scotland’s economy. Half of Scots agree that we now have an opportunity to make the economy stronger and fairer, and a vast majority expressed that job protection and staff wellbeing should be a priority. With ongoing stakeholder engagement, communications and media activity, it is our priority to highlight the significant contribution that inclusive business models can make here. Going into next year, we will continue to advocate the importance of these business models as an integral part of a Scottish wellbeing economy, building on the interest we have observed from a growing section of the Scottish business community. We are already planning a full programme of events, in line with any COVID regulations of course.  

Unparalleled in the challenges it has presented, 2020 has undoubtedly reawakened a sense of community and fuelled the urgency for a reset of our economy. We want to call on all champions of these models to use these unprecedented circumstances as a catalyst for change. By rallying together to promote the wider economic, social and environmental benefits that co-operative models can deliver, the community can make a real impact in aiding Scotland’s COVID recovery.